Discover 2014 Annual Report Download - page 144

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Fair Value Measurements
The Discover Pension Plan’s assets are stated at fair value. Quoted market prices in active markets are the best
evidence of fair value and are used as the basis for the measurement, if available. If a quoted market price is not
available, the estimate of the fair value is based on the best information available in the circumstances. The table below
presents information about the Discover Pension Plan assets and indicates the level within the fair value hierarchy, as
defined by ASC 820, with which each item is associated. All of the Company's pension plan assets were categorized as
Level 2 assets within the fair value hierarchy as of the end of the current period. For a description of the fair value
hierarchy, see Note 20: Fair Value Measurements and Disclosures. (dollars in millions):
December 31, 2014 December 31, 2013
Amount Net Asset Allocation Amount Net Asset Allocation
Assets
Registered Investment Company:
Domestic small/mid cap equity fund ......................................................... $ 31 8% $ 32 9%
Emerging markets equity fund .................................................................. 30 7 29 8
Global low volatility equity fund ............................................................... 20 5 19 5
International core equity fund ................................................................... 44 11 46 13
Common Collective Trusts:
Domestic large cap equity fund ................................................................ 54 13 50 13
Domestic fixed income fund ..................................................................... — — 7 2
Long duration fixed income fund ............................................................... 219 55 181 49
Temporary investment fund ...................................................................... 3 1 3 1
Total assets ......................................................................................... $ 401 100% $ 367 100%
The investments that are categorized as Level 2 assets primarily consist of fixed income securities and common
collective trusts. The common collective trust investment vehicles are valued using the Net Asset Value (“NAV”) provided
by the administrator of the fund. The NAV is quoted on a private market that is not active; however, the unit price is
based on underlying investments that are traded on an active market. The fair value of the stable value product is
calculated as the present value of future cash flows.
There were no transfers between Levels 1 and 2 within the fair value hierarchy for the years ended December 31,
2014 and 2013.
Cash Flows
The Company does not expect to make any contributions to the Discover Pension Plan for 2015.
Expected benefit payments associated with the Discover Pension Plan for the next five years and in aggregate for
the years thereafter are as follows (dollars in millions):
2015 .................................................................................................................................................................................. $ 13
2016 .................................................................................................................................................................................. $ 14
2017 .................................................................................................................................................................................. $ 15
2018 .................................................................................................................................................................................. $ 16
2019 .................................................................................................................................................................................. $ 17
Following five years thereafter ............................................................................................................................................... $ 103
Discover 401(k) Plan
Under the Discover 401(k) Plan, eligible U.S. employees receive 401(k) matching contributions. Eligible
employees also receive fixed employer contributions. Certain eligible employees also received employer transition credit
contributions from January 1, 2009 through December 31, 2013. The pretax expense associated with the Company